Has CSC breathed new life into its troubled $3.7B UK health contract?

Non-binding letter of intent with U.K. Department of Health defines a way forward for CSC to deliver health-care solutions and services.

There may be no second act in American lives but apparently there is in Britain, where Computer Sciences Corp. has resuscitated its $3.7 billion problem-plagued IT contract with the United Kingdom’s National Health Service.

CSC has signed a non-binding letter of intent with Britain’s Department of Health that defines a way forward for CSC to deliver health-care solutions and services, primarily across the North, the Midlands and East of England, in support of the NHS' reform agenda, the company said in a March 5 statement.

“The letter of intent reflects a new approach, moving toward a construct of more localized initiatives, reflecting the shift to more devolved decision-making and budgetary control within the NHS,” the CSC statement said.

In 2006, CSC won the multi-billion dollar contract to furnish IT services to the NHS in three of five regions over the next nine years.
The contract called for CSC to deliver IT services to the United Kingdom's northwest and west Midlands regions, as well as take over from Accenture Ltd. the responsibility of local service provider to the northeast and the eastern regional clusters.

But by last year the British government was considering cancelling the contract after CSC missed numerous deadlines and had delivered patient record systems to only three health trusts, according to ComputerWorld UK.

However, the government reassessed the deal at the end of 2011 after CSC told the U.S. Securities and Exchange Commission that there was "no existing right" for the NHS to terminate the contract, and said it could seek to recover hundreds of millions of dollars in court.

Going forward, CSC said, “Systems will continue to meet agreed rigorous national standards and will improve connectivity and interoperability of health providers in order to enhance overall patient care in England.”

The principles contained in the letter of intent are designed to establish a framework for a broad agreement to be entered into by CSC and the National Health Service by March 31.

As a part of this agreement, CSC will contract to deliver additional Lorenzo IT software implementations, adding to the 10 deployed to date, with options for more where demand materializes, the contractor said.

Beyond Lorenzo, CSC will continue providing a wide range of other solutions and services to the NHS, including general practitioner, ambulance, community systems, and digital imaging.

CSC said it “believes that the principles contained in the letter of intent represent the appropriate way to support the NHS’ reform agenda, providing value for money to taxpayers and, through technology, significantly improving standards of patient care in England.”

CSC, of Falls Church, Va., ranks No. 11 on Washington Technology’s 2011 Top 100 list of the largest federal government contractors.